Sadia and Perdigao

Sadia and Perdigao A Brasilian Food Superpower

Mandate How should Perdigao approach the merger with Sadia Valuation Strategic Rationale Moving Forward

Recommendation Offer a swap ratio of 0.27 shares per Common Sadia share Offer swap ratio of 0.22 per NC and Preferred share Will result in first year accretion of $1.81

Rationale

Post-Merger Snapshot • Perdigao (Now) • Brazil Foods SA (Post-Merger) • EBITDA of • Player if the agribusiness • Select product segments • EBITDA of • Dominate leader in Market • Compete across varied product segments • Take advantage of scale

Brazil: Growth in Agribusiness There is a growing Food industry with a focus on scale

The Benefits of the Merger A merger would create a leading company for Brazil

Why is ‘Now’ the Ideal Time? Now is the ideal time to merge to have the best return

The Decision to Merge Become Market Leader Capitalize on Scale Merge Now Sadia in a weak position

Valuation

Valuation Overview

Sadia Standalone Interest expenses creates a drag on Sadia earnings

Sadia Standalone – Cash Flow Sadia will be hard pressed to finance debt repayments

Valuation – Sadia WACC Sadia WACC estimated to be roughly 10.8%

Valuation – Sadia DCF D&A assumption is adjusted to reflect lower capital spending

Valuation – Swap Ratio Total Share issuance of roughly 160 million

Proforma Very accretive deal for all shareholders

Proforma Debt Very accretive deal for all shareholders

Proforma Cash Flow Merged company will be able to support debt repayment

Implementation

Timeline Regulators are the deal breaker

Derivative Major unpredictable fluctuations in inflation and currency rates are protected

Regulatory spin off Targeting domestic will satisfy regulators

Ownership Structure Existing Perdigao shareholders will own 56% of the Merged Company

Conclusion Thank you

Sadia and Perdigao